Credo Technology Group Holding Ltd. (NASDAQ: CRDO) is set to report fourth-quarter fiscal 2026 results on June 1 after the market close, with Wall Street expecting another period of rapid growth. Analysts currently project earnings of $1.03 per share, up 194.3% from the prior year, while revenue is expected to come in at $430.08 million, representing a 153% year-over-year increase. Credo’s own guidance for the quarter calls for revenue between $425 million and $435 million. The company has beaten the Zacks Consensus Estimate in each of the past four quarters, delivering an average earnings surprise of 31.6%.
Investor attention will focus on whether strong demand for active electrical cables, or AECs, and optical products continues to drive momentum. Credo has benefited from deeper engagement with hyperscalers, with three major hyperscaler customers each contributing more than 10% of revenue in the most recently reported quarter. The company also said it had secured a fifth hyperscaler customer, broadening its footprint in the cloud and AI infrastructure market. Demand from emerging neocloud providers has also been rising, adding another source of growth.
AECs remain Credo’s fastest-growing product line and the main revenue driver. The company says adoption of zero-flap AECs is accelerating because they offer much higher reliability and lower power consumption than optical alternatives, making them especially useful in large AI networking clusters. Credo’s IC business, which includes retimers and optical DSPs, is also gaining traction. Its PCIe retimer program remains on track for design wins in fiscal 2026, with revenue contributions expected in the following fiscal year. PCIe Gen6 AECs are already sampling and are scheduled for mass production in the first half of fiscal 2027.
Optics is expected to contribute only modestly in the fiscal fourth quarter, but the segment may become a larger growth engine starting in fiscal 2027. Management expects a meaningful ramp in ZF optics beginning in the first quarter of fiscal 2027. New products such as Cardinal optical DSP, the Robin optical DSP family and Blue Heron are also expected to help Credo gain market share over time.
A major strategic development came in April 2026 when Credo announced a $750 million deal to acquire DustPhotonics, following earlier acquisitions of CoMira Solutions and Hyperlume. The DustPhotonics purchase is intended to bring silicon photonics capabilities in-house, reduce supply dependence, lower costs at scale and strengthen Credo’s optical roadmap. Together with ZF Optical Transceivers and optical DSPs, the company expects optical revenues to surpass $500 million in fiscal 2027.
Profitability trends are also improving. In the last reported quarter, non-GAAP gross margin was 68.6%, up from 63.8% a year earlier, while non-GAAP operating margin rose to 49.6% from 31.4%. Non-GAAP net income reached $208.8 million, implying a 51.3% margin. For the upcoming quarter, Credo expects non-GAAP gross margin of 64% to 66%.
Risks remain, including intense competition from Broadcom, Marvell Technology and Astera Labs, along with macro uncertainty tied to tariffs. Credo’s revenue concentration among a limited number of large customers also creates exposure if any major client reduces spending. Still, with strong AI networking demand, expanding hyperscaler relationships and a powerful product roadmap, the stock is viewed as well positioned heading into earnings.
